FHA 203k Streamlined Limited Loan in Dover

The 203k Streamlined loan option allows Dover borrowers to finance the purchase price plus up to an additional $35,000 into their mortgage to pay for upgrades or improvements.

The Dover Streamlined 203k has no minimum loan amount requirement, and is designed for homes that need non-structural repair, upgrades or modifications.

Basics Of FHA 203k Streamline Refinance Loan

When shopping for a new loan to finance your Dover property, there is a big difference between the qualifying guidelines, interest rates, down payment requirements and benefits when comparing an FHA 203k loan and a Conventional Mortgage.

Most conventional loans in Ohio provide permanent financing on move-in ready homes with a current value that can be easily calculated and established. A lender’s loan guidelines dictate that they can not close a loan and release proceeds unless the condition and marketability of the property provides adequate security for the mortgage.

This means the home must meet pre-determined appraisal standards. If rehabilitation is required, the majority of lenders require the improvements to be complete before they will offer a long-term mortgage. Therefore, if a potential homebuyer is interested in purchasing a house in need of upgrades or repair, they will typically need to first secure financing to buy the home, have adequate savings or obtain another loan to cover the rehabilitation work, then refinance into a permanent mortgage when the work is complete.

The acquisition and construction loans not only have costs associated with each, but often involve relatively high interest rates and short repayment periods. The Ohio FHA 203k program was created as an affordable alternative to this situation. Using a 203k, the borrower must only qualify for and obtain a single mortgage loan to finance the property’s purchase and renovation.

The total mortgage amount is based on the projected value of the property after completion of the work. The difference between the current value and the projected value helps establish the amount of additional funds which will be made available to the borrower to finance improvements.

A FHA 203k loan is just like a regular FHA loan as far as credit qualifying and down payment requirements, but with an added construction element.

Streamlined 203k Requirements

The Streamlined 203k has fewer requirements and is designed for smaller, less complicated, lower-cost projects that are considered cosmetic improvements, such as minor roof repairs, paint, new appliances, flooring, a new heat and air conditioning system, or doors and windows.

Projects That Do Not Qualify For A Streamlined 203k loan in Dover:

Major structural repairs

New construction, such as a room addition.

Repairs requiring detailed plans and specs.

Any repair taking more than 6 months to complete.

Repairs that would necessitate more than 2 draws.

Luxury items that are not a permanent part of the real estate.

The use of an FHA-designated Consultant is not necessary with the Streamlined 203k. This option is used when an architect, engineer or multiple inspections are not required. As a result, this is typically the less costly choice.

Streamlined (K) – Limited Repair Program

The Streamlined 203k has no minimum loan amount requirement and is designed for homes that need non-structural repair, upgrades or modifications. This loan option allows borrowers to finance the purchase price plus up to an additional $35,000 into their mortgage to pay for upgrades or improvements.

One of the main differences with the Streamlined (k) is that borrowers are not required to work with an FHA-designated Consultant to complete their rehab project. The Streamlined 203k has fewer requirements and is designed for smaller, less complicated, lower-cost projects that are considered cosmetic improvements, such as minor roof repairs, paint, new appliances, flooring, a new heat and air conditioning system, or doors and windows.

The use of an FHA-designated Consultant is not necessary with the Streamlined 203k. This option is used when an architect, engineer or multiple inspections are not required.

FHA-Designated Consultant Required on A Standard 203k

On a Standard 203k loan, FHA requires that an FHA-designated Consultant create and document a work plan before they will approve the loan. The consultant’s job is to ensure that the work meets FHA and local building code requirements.

All 203k programs allow borrowers to finance the purchase price of the property, the closing costs, plus the cost of repairs. The additional funds are held in a Rehab Account, and pre-determined payouts provide the homebuyer with cash to pay for property repairs or improvements after the loan closes.

Did You Know?
A rehab loan can be used for a purchase or refinance, and you do not have to be a first-time homebuyer to use it. Contact Us today at (513) 854-6725 to see how a 203k loan can increase the value of your property.

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